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Friday, March 26, 2010

Mammoth Oil Discovery Off Sarawak Or Sabah Waters?

Gua Musang MP recently made a startling claim that Petronas had made a “very big discovery of an oil field, probably the biggest in the world”. This was stated during his talk titled, ‘Conversations on the Constitution and Oil Royalty – A Constitutional Right?’ organized by the Bar Council.

Following his claim, speculation is rife that the discovery in question, is either in Sarawak waters near Natuna Island or in Sabah waters fringing the Spratley islands.

Petronas was founded on 17 August, 1974 and is ranked as the 80th largest company in the world by Fortune Global 500. Petronas contributes about RM75billion annually to the national coffer, which is about 42% of GNP.

In response Petronas has come out to refute Razaleigh’s claim outright.

"We can continue to find small and medium sized fields in the region, but we don't hope to be able to find world scale discoveries," Petronas vice-president for exploration and production business, Ramlan A Malek, told a media briefing.

Meanwhile, PKR vice-president Jeffrey Kitingan is clamouring for an increase in the prevailing 5% oil royalty to be increased to no less than 20%.

Jeffrey questions the secrecy of the national oil corporation which is not answerable even to parliament, and of Petronas’ agreements with oil-producing states which are so top secret that even the Sabah state government , party to the agreement has no access to the information.

“It has come to my knowledge that 80 percent of the oil and gas produced by Petronas is not sold directly to the world market,” charged Jeffrey, not for the first time.

Jeffrey repeats his claim that Petronas oil and gas is channelled through six 'option holders' who obtain the supply from Petronas at well below market price, which in turn, pocket huge profits from selling on the world market. If true, any price increase on the world oil market benefits the ‘option holders’, and not the nation.